#AskTheTaxWhiz: Excise tax on sugar-sweetened beverages
For retailers such as sari-sari store owners who sell sugar-sweetened beverages, do they have to file and pay the excise tax on their own?
No, according to Revenue Regulations No. 20-2018, the excise tax will be imposed on manufacturers or importers. Persons who have possession of sugar-sweetened beverages whose excise tax has not been paid are also liable to pay.
Since the excise tax needs to be paid before being circulated, by the time it has reached retailers, the tax would already have been paid.
For locally-manufactured products, taxpayers will need to file BIR Form No. 2200-S to be submitted to the concerned Revenue District Office. For imported products, taxpayers will need to apply for Authority to Release Imported Goods with the Excise LT Regulatory Division of the BIR.
I was watching the news and heard that the BIR has not yet reached its target collection for the excise tax on sugary drinks. How can we guarantee that the right taxes are being collected?
Nueva Ecija 1st District Representative Estrellita Suansing commented that the Bureau of Internal Revenue (BIR) should collect the P12 excise tax, unless proven that the product is subject to the P6 tax instead. However, according to BIR Deputy Commissioner Marissa Cabreros, even if the initial imposition is P6, the BIR can still collect a P12 tax if the initial imposition is found to be wrong.
In addition, all manufacturers and importers were required to submit an inventory list of their existing sugar-sweetened beverages as of December 31, 2017. The Food and Drug Authority will also help the BIR by conducting a post-marketing surveillance of sugar-sweetened beverages.
There are also penalties imposed under Revenue Regulations No. 20-2018. Manufacturers who are found to have misrepresented their inventory list will be penalized with a revocation of their permit. They will also be liable to pay deficiency taxes, surcharge penalty, and interest penalty.
It will also be grounds for tax evasion, a criminal case which could result in a penalty of P500,000 to P10,000,000, and imprisonment of 6 to 10 years.
These penalties are imposed by the ongoing tax reform and implemented by the BIR's regulations. While the tax reform is widely-publicized, the various issuances could be overlooked and cause unnecessary penalties. Tax seminars are a good way to learn tax compliance, but these seminars forego the benefit of an interactive discussion. A more exclusive tax coaching will be suitable for addressing specific concerns.
The Asian Consulting Group, the Philippines' first Tax Hub, provides an Exclusive Tax Coaching (ETC) for startups and MSMEs to help them understand and comply with basic tax regulations. To learn more about ETC, you may e-mail us at email@example.com or call (02) 622-7720.
Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2017 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founding president of the Asian Consulting Group (ACG) as well as the Center for Strategic Reforms of the Philippines (CSR Philippines). You may email him at firstname.lastname@example.org or visit www.acg.ph for tax-related concerns.